So my husband just got fired- it’s a good thing, don’t worry. He delivered his soul in bloody chunks every day he stepped into the place. After much soul searching (searching what was left after working at that hellhole), he’s decided to go back to school and finish his degree, thus opening up less horrible career options. I’m a middle school teacher, so, well, I don’t make that much. We have two kids 2 and under, so husband is going to watch the kids and scrabble up some extra money by selling stuff on eBay.
Here’s the debate. I drive a 2008 Honda Element, which has 30,000 miles on it. We’ll be paying it off in the next month with the money that WAS in my husband’s work pension fund. (We’re young, so we’re not too worried about digging into his retirement. Besides, I have my awesome teacher retirement to look forward to.) He drives a 2006 Honda Civic with 100,000 miles on it, paid in full. We’re debating on who should drive which car. My Element gets 21-24 mpg and his Civic gets around 30. I have a 7 mile drive to work and my husband will be staying near home most days. If he leaves, it will be on short-ish trips to the park and all those other places that stay at home parents go. Who should drive which car? Should we drive the Civic more because it has a better mpg or the Element because it has fewer miles on it? Let me remind you- we don’t have a lot of money to work with right now. Any ideas?
Whomever does the most miles should drive the Civic. The math is pretty straightforward. The total mileage on the car is basically irrelevant if you take care of them.
And in your case, btw, “taking care of them” means that you should be following the service schedule for “severe” service on both cars. Both of these cars apparently do mostly short trip driving. That will kill a car faster than anything but an accident.
Thanks for the feedback! We’re also in Phoenix, which is really tough on cars (running the AC 9 or 10 months a year…). Do you have any reliable sources for a realistic maintenance schedule for the cars? Everything I’ve found (in my 20 minutes of looking) is more geared toward the heavy-modder type.
Congratulations to both you and your husband. Hubby for using his time wisely to earn his degree, and you for choosing a noble though underpaid profession, which in this day and age, still offers an amount of security, others don’t have. If you are not in a state that penalizes you with the off set, find away of contributing to social security as well, during the summer especially. Your retirement will then be quite reasonable.
I would balance the use, using either by convenience. The worse you can do is let either sit and not be used regularly. Regardless of which you “try to save”, it will be at the expense of the other as cars wear by age as well as miles. Obviously, Cig is completely right about the mileage, so leaning but not exclusively using the Civic might be of cost benefit during the week.
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PS, don’t worry about 7 miles being too short. It isn’t in warm weather and the AC on most cars runs during the winter for dehumidifying in the north. It gets used as much if not more then Arizona. If you can possibly store car’s out of the sun when not in use, at least in a carport, that would be a big boost to longevity where it counts, in the body.
It would be cheaper for you to take the Civic, of course. However, if you feel the Element is more reliable or you really like driving the Element over the Civic, the cost difference isn’t that great.
Will he drive so few miles that you might qualify for a low-mileage insurance plan on his car? You might want to ask your insurance agent about that.
Once he’s signed up for school, make sure to check into discounts that he might be able to get on cellphone plans, computer hardware and software, and other things like that.
If you don’t mind a suggestion, make an effort to replace that retirement money sooner rather than later. Money put away early in life really multiplies.
Get both cars paid off and keep them both for another 10 years. Save the money you’d spend for car payments, and use that money to pay back the retirement fund, pay cash for your next car (unless there is 0% financing), and build a college fund for those kids.
For now you should drive the Civic daily to save on gas. The Element is good for errands including trips to Lowes or Home Depot to keep husband busy fixing stuff now before he starts his schooling. When he starts going to school daily, then whoever drives the most miles per week should drive the Civic. Civics can rack up a lot of miles and they hold up fine.
Honda’s have interference motors and you need to know if one or both of the cars has a timing belt. If either do have one, make sure to get it changed as per Honda recommendation which I believe is 105K miles or 8 years whichever comes first. You can research this on the “gates.com” web site.
You asked about maintenance - your owners manual for each car should explain what’s needed clearly. Follow it closely, and obey both the miles and months requirements.
No question in my mind. You drive the new one and he keeps the old one at home. In our house, I alway drove the old one on my 50 mile one way commute, and my wife always drove the new one on her 1 mile commute. The exeption would be if he needs the bigger car to haul the kids around on some days. Good luck to you. I’m retired and I’m glad I don’t have to deal with the whole career hassle anymore. My last few years mimicked your husbands, not because of the work, but because of the jerks that weasled their way into the organization.
If you husband doesn’t take the Element on a trip of at least 7 miles once a week, then on one day, you should drive it just to heat it up enough to burn the acids out of the oil and the exhaust system.
I agree that you should follow the recommendations in your maintenance manual.
I also suggest that you reconsider raiding your husband’s 401K. I have been putting the max amount in my 401K/403B for almost my entire working career. When I retire in 10 years, I will have a decent retirement income, but it will be only about half of my current gross annual earnings. If you hope to have similar results, the first money in needs time to grow. You probably don’t have as much time as you imagine. Sure, it’s more that twice your years when you retire, but you will need well over a million dollars in today’s money to retire comfortably. Only you know what’s right for your family, but think twice e you pull anything out.
JTS makes a great point. Do NOT pay off the loan early with your 401k. Scrape and scrimp, but leave that money there and continue to make payments if at all possible. You will always have reasons to ‘borrow’ from the 401k, it’s very hard to pay it back.
When you’re in a cash crunch, it’s better to keep the cash you have as much as possible.
Have you calculated the penalty for pulling money out of a retirement account early? This is probably not a wise decision. What’s the interest rate on the auto loan? If it’s fairly low, you may be better off just paying it down as best you can without using retirement money.
Please do not repeat the hoax that no one can retire without a million dollars. It is not true. It is a marketing gimmick by money managers to frighten you into giving them your money.
We’re not talking a million, we’re talking the payoff on a car. I think there are many more folks in or near retirement without enough money that with TOO much money, don’t you?
Wow! Thanks for all the feedback, guys. Let me give you a few details. We’re pretty darn careful with our money, so this is all a bit overwhelming. There’s about $13k in the 401(k), and with the early withdrawal fee, it should be just about enough to pay off our $11k car loan. I have a slightly smaller 403(b) at work, to which I’m contributing and don’t plan to stop contributing to. We also have a 3 month emergency fund that we won’t touch unless it’s truly an emergency. As in, not having enough food to eat emergency, not wanting a new tv emergency. We’re 26 and 27, so I’m really not too worried about the long-term impacts of digging into the 401(k). Besides, paying off the Element will give us the freedom for my husband to stay at home with the kids. He insured most of our family, so we’re losing his income plus having to pay $400 monthly to get health insurance for everyone. We’re digging deep right now- I’m hoping to teach summer school and pick up another coaching job. We switched our phone plan to a cheaper one. We slashed our food and entertainment budget. We finally got around to buying ceiling fans to save on astronomical energy costs. We’re not embarrassed to shop at Goodwill.
Whew. Back to the car questions. We really do need two cars- Phoenix has awful public transportation, and my husband is flipping stuff he buys on Craigslist to fill in the gaps in our budget. I’ve heard the timing belt mentioned before. Do y’all recommend going to the dealership to get this done? I personally can’t stand the dealership- when we bought the Element, it was the first time we’d ever bought a car from a dealership. Probably won’t do it again. They were pushy and edging on dishonest. Their service department was equally pushy when I got my oil changed there (won’t do that again). I like to call us do-it-yourselfers…in everything but cars. I’m the handiest one in the family, and my skills are limited to the table saw and fixing bathroom faucets. Would we be safe asking around for a trustworthy independent mechanic? Do you think we’d save money doing that, or should we just go to the dealership?
Thanks again- you guys are a ray of hope in a pretty scary time for our family!
I’d agree to try not to touch the 401K but if you must you must. Lots of people have had to cash out over the past few years. Don’t forget though, your net will be minus not only the 10% penalty but also tax.
You don’t have to go to a dealer for the timing belt but it needs to be a trusted shop familiar with Hondas. You want the job done right and can ruin an engine if they mess it up or if the belt breaks. Also don’t forget the transmissions are Honda week spots so check on the recommended fluid change schedules (probably every 30K). If they have the drain plug like most Hondas, it can be a DIY job.
I only suggested that you think very seriously about using hubby’s 401K money, and it appears that you have. You have to do what makes sense for you, and we can’t know that from a distance.
I suggest that you find a garage that can do the job and get a quote. You should have the timing belt, water pump, and belt tensioners replaced at the same time. The tensioners and water pump aren’t expensive and have to come off anyway. If you don’t know a mechanic, ask your friends and neighbors for a recommendation. Eventually, you will find a few places that several people mention, and you can get estimates from them.
@Irlandes, maybe you can retire with less than $1,000,000, but I can’t. You want to live in a very low cost area, and I don’t. I’d like to continue to live where I am now, and I need lots of money to do so and plan to live to 100. And I have to support my wife, too. I know that my money will continue to grow after I retire, and I want to travel a little. No one told me how much I need in a nest egg to retire; I figured it out myself.
The best thing you can do for your retirement plans includes contributing to social security along with your teacher plan, if no off set provision in your state by both you and your husband. Continue 401k and under no circumstances, can you afford to get a devorce down the road. You will need at least three incomes in retirement to live well. Two dependable govt. backed and a private plan work very well. Don’ t put all your eggs in the market based plans as they can dictate when you can afford to retire, not you. Under no circumstances, vote against your retirement interests as well. :=)